Decree No. 253/2026/NĐ-CP and Circular No. 87/2026/TT-BTC providing guidelines for the implementation of the Personal Income Tax Law

I. OVERVIEW OF THE LEGISLATION

• Reference numbers: 253/2026/NĐ-CP; 87/2026/TT-BTC

• Date of issue: 30 June 2026

• Effective date: 1 July 2026; specifically, provisions relating to income from business activities and from wages and salaries of resident individuals shall apply from the 2026 tax year, with the exception of provisions concerning meal allowances during shifts and lunch allowances.

• Issuing authority: The Government; the Ministry of Finance

• Replacement / Amendment: Replaces Decree No. 65/2013/NĐ-CP and repeals Article 3 of Decree No. 91/2014/NĐ-CP and Article 2 of Decree No. 12/2015/NĐ-CP. Replaces Circular No. 111/2013/TT-BTC and the Circulars amending and supplementing Circular No. 111/2013/TT-BTC

Summary of key provisions:

Decree No. 253/2026/NĐ-CP and Circular No. 87/2026/TT-BTC provide detailed guidance on the Personal Income Tax Law No. 109/2025/QH15, replacing the entire system of previous guidance documents. Of particular note for resident individuals: the thresholds for insurance and dependent allowances have been raised; a completely new deduction for medical and educational expenses has been introduced; and, for the first time, digital assets, .vn domain names and carbon credits have been included within the scope of personal income tax.

II. KEY NEW PROVISIONS

Point 1. The threshold for the tax deduction for non-compulsory insurance contributions has been tripled

• Details: The total amount of non-compulsory insurance contributions eligible for tax deduction has increased from 1 million to VND 3 million per month

• Previous provision: Voluntary pension insurance contributions were deductible up to a maximum of VND 1,000,000 per month.

• New regulations: The tax allowance has been extended to cover life insurance as well. At the same time, the total tax allowance for contributions to supplementary pension schemes, voluntary pension schemes and life insurance has been increased to VND 3,000,000 per month.

Point 2. The income threshold for dependants has tripled

• Content: The income threshold for being classified as a dependant has been raised from 1 million to VND 3 million per month; the criteria for loss of working capacity have been changed to a quantitative assessment based on a percentage

• Previous regulations: A dependant is defined as a person whose average monthly income does not exceed VND 1,000,000; a person deemed to have lost their ability to work is identified through a list of specific conditions (such as AIDS, cancer, chronic kidney failure, etc.).

• New regulations: The income threshold for dependants has been raised to VND 3,000,000 per month; the criterion of ‘inability to work’ has been quantified as a reduction in working capacity of 81% or more, as determined by a medical assessment.

Point 3. Deductions for medical and education expenses

• Content: For the first time, taxpayers are permitted to deduct actual medical and education expenses incurred from their taxable income

• Previous regulations: There was no deduction for actual medical or education expenses incurred (only deductions for charitable, humanitarian and educational contributions were permitted).

• New regulations: Decree 253/2026/NĐ-CP introduces additional tax deductions for actual medical expenses (up to VND 23 million per year) and education and training costs (up to VND 24 million per year) incurred by taxpayers and their dependants, provided that valid invoices or supporting documents are available (Article 49, Clauses 2 and 3). Consequently, taxpayers who incur medical expenses or tuition fees for themselves or their dependants may claim an additional deduction of up to VND 47 million per year from their taxable income, thereby significantly reducing the personal income tax payable.

Point 4. Wages for night work, overtime and days worked without annual leave

• Content: Tax exemption for night work, overtime and work on days when annual leave is not taken

• Previous regulation: Tax exemption applied only to the difference between night shift/overtime pay and normal daily pay.

• New regulations: Full tax exemption on wages and salaries for night work and overtime, and an extension of the tax exemption to cover wages paid for unused annual leave in accordance with labour legislation.

Point 5. Codification of the meal allowance threshold and an increase in the deduction threshold for incidental income

1. Content: The tax-free meal allowance threshold is directly set at VND 1.2 million per month

• Previous regulation: The threshold for meal allowances (shift meals and lunch) that are not included in taxable income referred to ‘in accordance with the guidelines of the Ministry of Labour, Invalids and Social Affairs’, without specifying a particular figure in the regulation.

• New regulation: The regulation now explicitly sets the tax-exempt threshold for meal allowances at the amount exceeding VND 1,200,000 per person per month.

2. Content: Increase the tax deduction threshold for occasional income (where no employment contract has been signed or the employment contract is for less than three months) to VND 5 million, instead of the previous rate of VND 2 million

• Previous regulation: A 10% deduction was applied when paying casual income of VND 2 million or more per payment.

• New regulation: The threshold for withholding tax on occasional income has been raised to VND 5 million per payment (including payments made following the termination of an employment contract). For payments of less than VND 5 million per payment, tax will be withheld if the individual so requests.

Point 6. Simplification of the procedure for registering dependants

• Content: The requirement to issue a separate tax identification number for dependants has been abolished; the deadline for submitting applications has been standardised as 31 December

• Previous regulations: Dependants were required to register and be issued with their own tax identification number in order to qualify for tax relief; the deadlines for submitting supporting documentation varied depending on the category of dependant.

• New regulations: The requirement for dependants to be issued with a separate tax identification number has been abolished; registration alone is now sufficient. The deadline for submitting documentation to prove dependancy has been standardised as 31 December for all cases. Furthermore, the National Population Database will now be utilised to automatically identify dependants.

Point 7. Digital assets (cryptocurrencies) are subject to personal income tax in Vietnam for the first time

• Content: Taxable income from the disposal of virtual assets and cryptocurrencies is subject to a 0.1% tax on the disposal price, in the same way as securities

• Previous regulations: No regulations in place

• New regulation: Taxable income from the transfer of digital assets (virtual assets, cryptocurrency) is subject to personal income tax at a rate of 0.1% of the transfer price for each transaction, regardless of whether a profit or loss is realised.

Point 8. Inclusion of income from .vn domain names, carbon credits and auctioned number plates in taxable income

• Content: Certain types of income are now subject to personal income tax, at a rate of 5% on the portion of income exceeding VND 20 million per transaction

• Previous regulations: No provisions existed

• New regulations: Income from the transfer of Vietnamese national internet domain names ‘.vn’, emission reduction certificates/carbon credits, and vehicle number plates won at auction is now classified as other income: a tax rate of 5% applies to the portion of income exceeding VND 20 million per transfer.

III. RECOMMENDATIONS FOR BUSINESSES

01. Reviewing employees’ taxable income: The HR department and employees should examine cases of tax exemptions and increases in deductions from wages and salaries—such as meal allowances, overtime pay, and days not taken as annual leave—to determine the correct taxable income.

02. Completion of the assessment of working capacity for dependants: Dependants who are deemed to have lost their working capacity must undergo a medical assessment confirming a degree of disability of 81% or more before applying for a family allowance under the new criteria.

03. Additional deductions for medical and education expenses: Collect and retain all invoices and receipts for medical treatment and tuition fees incurred by yourself and your dependants in order to claim the additional medical and education deductions when filing your 2026 tax return.

04. Review of tax obligations relating to digital asset transactions: Individuals who have transacted in digital assets (cryptocurrencies), .vn domain names, carbon credits or auctioned vehicle registration numbers must proactively declare and pay personal income tax to avoid back-tax claims and late payment penalties.

CONTACT US FOR ADVICE

• Mr Nguyen Bao Anh – Deputy General Director in charge of Tax, Transfer Pricing & Outsourcing Services (Email: anh.nb@a-c.com.vn)

• Ms Vo Thi Kieu Ngan – Head of Tax Advisory Services (Email: ngan.vtk@a-c.com.vn)